Cliff Buchan
News Editor

Itís now official. ISD 831 has made significant improvement in its fund balance situation.

The school board, meeting in regular session Thursday, Dec. 2, accepted and approved the formal audit of the 2003-2004 school year prepared by MMKR Certified Public Accountants. The districtís fiscal year runs from July 1 to June 30.

Auditor Aaron Nielson reported that the districtís unreserved or undesignated fund balance on June 30, 2004 was $1,896,949 million. Thatís an increase of $1,719,005 from the June 30, 2003 undesignated fund balance of $177,944.

The positive move marks the second consecutive year of a strong change in the districtís undesignated fund balance, a move strongly supported by the auditing firm.

The audited figure on June 30 of this year is a $4.2 million swing from the June 30, 2001 audit which showed an undesignated fund balance of a negative $2.3 million which propelled the district into statutory operating debt.

The district emerged from SOD a year ago.

When all funds are considered, the district is now showing a total fund balance of $3.5 million. The total is for all reserved and unreserved or undesignated funds. On June 30, 2003, the districtís total fund balance was just over $2 million.

The results from the past two fiscal years for all funds is a stark contrast to the negative $3.7 million the district showed during its audit completed for the fiscal year ending June 30, 2001. Thatís a positive swing of $7.2 million for all district funds, according to the audit.

While Nielson applauded the district for its work, he said the firm continued to recommend an even higher unreserved fund balance for ISD 831 as a safeguard for unforeseen expenses.

ìOver the past three fiscal years, the district has made significant progress in improving the financial condition of this fund,î the audit report said. ìWe commend the district for their efforts in this area, understanding this is not an easy undertaking, with the difficulty being further compounded by the impact of the current economy and the resulting effect on school district funding.î

In evaluating the fund balance level, MMKR presented statistical data taken from 20 school districts with an average daily membership of about 9000 students.

Forest Lakeís average daily membership is estimated by the audit at 7810 students.

The database shows an average general fund unreserved fund balance of 6.1 percent as a percent of expenditures as of June 30, 2003, the most recent date when data is available.

ISD 831ís current audited unreserved fund balance is 3.2 percent of expenditures.

Nielson said the task of building its fund balance has been complicated by no new basic state aid over the past three years. The basic state aid level per pupil remains unchanged at $4601.

ìIt is interesting to see that, despite funding restrictions, school districts, on average, have improved their unreserved fund balances the last few years,î the audit report said. ìThis is the result of districts adapting to the funding restrictions by cutting costs, increased community support in the way of operating referendum and a combination of other factors.î

As 2004 moves to a close, the district is now preparing for a new round of budget adjustments for the 2005-2006 school year that begins on July 1, 2005. The district has announced that it will cut some $2 million in general fund spending to keep expenditures in line with revenues.

The district made budget reductions of $2 million for the current school year.

A budget-cutting process involving staff, students, parents and community members will be rolled out early next year.

Technology bids

The school board on Dec. 2 also voted 7-0 to authorize the administration to go out for bids for technology equipment that exceeds the mandatory bid threshold of $50,000.

Larry Martini, director of business affairs, said the products to be bid will likely include replacement of computer labs and maintenance and repair needs.

The plan will address elementary needs in the current year budget (2004-2005) and secondary needs in the 2005-2006 school year.

Martini said the administration will now form its final bid package and may return to the school board for a final review. The bid award would fall to school board discretion.

How much will be spent is not certain. Martini said the final bid packages and school needs decisions will ultimately determine how much the district will spend.

The expenditures are part of the current budget and what will be in the budget next year, Martini said.

Under the bid plan approved last week, technology goods and services that exceed $10,000 but do not meet the $50,000 threshold may be obtained by the district through sealed bids or by direct negotiations of the purchase by obtaining two or more quotations when possible, Martini said.

Replacement computer labs will occupy most of the districtís spending. ìThatís pretty much the (main) emphasis,î Martini said.

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Forest Lake Times
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880 SW 15 St.
Forest Lake, MN 55025
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